International - Transfer Pricing of Intra-Group Cash-Pooling Arrangements Through the Lens of Business and Economic Reality
- K. Łukosz; A. Ursu; M. Druga
- International Transfer Pricing Journal, 2018 (Volume 25), No 3
- 30 April 2018
This article provides a business perspective on the transfer pricing of intra-group cash-pooling arrangements, in particular with regard to the commercial rationality of the parties’ conduct and assessing the options realistically available. The authors describe a series of business-driven analyses focused on liquidity, which can be used to examine the commercial rationale of keeping liquidity cash positions in the group cash pool system by individual subsidiaries. This article also explains the importance of maintaining a healthy liquidity position from the general corporate finance theory perspective and provides market evidence behind the healthy levels of current ratios among a number of companies across variety of economic sectors.